Contractor Did Not Finish, But I Paid in Full – Now What?

Posted over 4 years ago. Applies to Texas, 6 helpful votes

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It happens often – the owner pays the contractor in full, but the contractor does not finish the project. Or, the contractor’s work is defective, and he does not return to correct it. Now what? First, you need to document the situation. You need to establish that the work is incomplete or defective. Take photographs, preferably with a digital camera which puts the date on the image. Then, write to the contractor by certified mail, to request that he return to complete/correct his work. You need to be specific – list what needs to be completed/corrected. The contractor may return to complete/correct his work, and the matter is resolved. If not, you should take bids to complete/correct the work, making sure that the scope of work for the replacement contractor matches the scope of the original contractor’s work. You cannot charge the original contractor for additional work, unless the additional work is necessary to resolve problems that the original contractor caused. With the replacement contractor bids, you should again write by certified mail to the original contractor and advise that if he does not return to complete/correct his work within five days (or advise in writing that he needs a reasonable amount of additional time), then you will default terminate your contract with the contractor, and hold him responsible for the money paid to the replacement contractor to complete/correct the original contractor’s work. If the original contractor returns and completes/corrects the work, the matter may be resolved. If not, retain the replacement contractor, and write a third time to the original contractor (by certified mail) and advise that your contract with the original contractor has been terminated for default, and that you will hold the original contractor responsible for the money paid to the replacement contractor. Unleash the replacement contractor, and have him complete/correct the original contractor’s work. The replacement contractor needs to keep track of the charges that relate to completing/correcting the original contractor’s work. You cannot charge the original contractor for costs that are enhancements or betterments. For example, if the original contractor was supposed to install a $100 fixture, you cannot charge for a $200 fixture. Once you have the itemized charges from the replacement contractor, you should write to the original contractor and present the charges for reimbursement. If the original contractor pays, or you negotiate an acceptable deal, then the matter is resolved. If not, you may have to file suit to collect your money. If the amount of money is within the jurisdiction of a small claims court, you may wish to file suit there, as you can file the suit yourself, the costs are low, and a court date is fairly quick. If the amount of money exceeds a small claims court’s jurisdiction, you should retain an attorney to undertake collection proceedings. The documentation and letter writing will be evidence in a collection suit.

Additional Resources

For more information, visit The Construction Report web site: http://www.theconstructionreport.org

The Construction Report

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